Real estate markets in North America and Europe have performed poorly over the past year, with property prices tumbling in the wake of the US sub-prime crisis. As a result, the value of many international developers has fallen.
“The rest of the world is struggling with sub-prime and a reduced ability to make growing profits,” says Chris O’Donnell, chief executive officer of Nakheel.
“This creates opportunities, but not at this point because there is still a possibility for further downward pressure.”
In the past, Nakheel has focused on projects in Dubai, but over the past year it has also adopted an international outlook.
“We have an overall strategy to be an international real estate company,” says O’Donnell. “But our business focus will remain in the Middle East and, of course Dubai.”
According to O’Donnell, Nakheel’s additional focus is a response to approaches from overseas companies looking to work with the company.
“The Nakheel brand is well sought after and it is difficult to turn down clients when they want to get involved in projects with us,” he says.
Nakheel also inherited the real estate assets of its sister company, Istithmar, last year. The deal gave Nakheel a range of international assets, including One Trafalgar Square in London, and high-profile properties in New York.
In Africa, it is part of a consortium building the Mazagan resort in Morocco, and it is also developing the V&A Waterfront in South Africa, the Kempinski Palace Hotel in Djibouti City, and resorts in Zanzibar and the Comoros islands.
In Asia, it is part of a joint venture building two mixed-use towers in Singapore, and has an 80 per cent stake in a hotel development in Bangkok (MEED 21:11:07).
Despite the company’s international outlook, O’Donnell remains bullish on the real estate market in Dubai and the Middle East.
“The key to this market is population growth, and given the construction constraints, we are unable to deliver enough product,” he says.